The project would have used natural gas to produce 140,000
barrels a day of liquid fuels and other products normally made
from oil, The Hague-based company said in a statement today.
Despite ample U.S. gas supplies from a boom in shale production,
gas-to-liquids isn’t “a viable option for Shell in North
America,” the company said.

Shell started the first commercial gas-to-liquids plant in
1993, using a process developed in Germany and used to make
fuels during World War II. The company completed the $19 billion
Pearl gas-to-liquids facility, the world’s largest, in Qatar in
2011. South Africa’s Sasol Ltd., the largest producer of motor
fuel from coal, announced plans last year to build a $14 billion
gas-to-liquids plant in Louisiana.

“While we cannot speak to another company’s plans, we
continue to view our proposed GTL facility in Louisiana as a
very attractive opportunity as we advance it through the front-end engineering and design phase,” Russell Johnson, a spokesman
for Johannesburg-based Sasol, said in an e-mail today.

The economic viability of turning natural gas into fuels
depends on the relationship between oil and gas prices. For a
gas-to-liquids plant to make money, a barrel of oil has to trade
at a ratio of about 16 times the cost of a million British
thermal units of natural gas, Sasol Chief Executive Officer
David Constable said in an interview last year.

Louisiana had offered Shell a $112 million grant as well as
tax incentives for the project, which would have created 740
direct jobs and employed as many as 10,000 construction workers
during peak building activity.